SBI big draw for home loan customers

Tags: Banking

Lender acquires over Rs 800 crore home loans from rival banks in Oct-Nov

In one of the largest acquisitions of customers in retail banking, State Bank of India (SBI) has acquired about Rs 800 crore of home loans in the first two months of the third quarter (October-November) from rival banks and institutions as customers flock to the public sector bank to avail lower rates of interest.

Customers with over Rs 400 crore of home loans have shifted to SBI in November so far to avail of the lower interest rates. The bank offers 10.1 per cent interest rate for home loans up to Rs 30 lakh, and 10.5 per cent for loans over Rs 30 lakh.

Pratip Chaudhuri, chairman and managing director, SBI, told Financial Chronicle, “Our home loans are reporting a 30 per cent growth over the previous year, and in a month, we have already acquired customers with over Rs 400 crore worth of loans who wants to shift to SBI to enjoy lower interest rates. Our’s is a straight product with no hidden charges and costs. It is certainly one of our focus areas now.”

SBI is the largest home loan provider with Rs 1,09,800 crore of home loans at the end October. In October, the bank’s home loan book grew by Rs 419 crore. At the end of the second quarter ended September 30, total home loan book was Rs 1,08,381 crore, of which, Rs 87,996 crore came through sub-Rs 30 lakh loans.

Its nearest competitor, HDFC, with a portfolio of Rs 1,03,930 crore, charges 10.25 per cent to 10.75 per cent for loans up to Rs 30 lakh and 10.5 to 11.50 per cent for loans above Rs 30 lakh. It also has a fixed rate loan where the interest rate is 10.75 for loans up to Rs 10 lakh. For loans above Rs 10 lakh and up to Rs 75 lakh, the rate of interest is 11 per cent and for fixed loans above Rs 75 lakh, HDFC charges 11.25 per cent. HDFC officials were not available for comment despite repeated efforts by Financial Chronicle.

ICICI Bank, the third largest player in home loan market, is also looking at aggressively growing its portfolio. It has a total home loan book of Rs 61,391.4 crore at the end of the second quarter ended September 30, which grew by Rs 1,929 crore over the preceding quarter. It has a higher interest rate of 10.25 per cent for loans up to Rs 30 lakh and 10.5 per cent for loans above Rs 30 lakh.

manjuab@mydigitalfc.com

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